Important changes to super
There are several legislated changes to super coming into effect from 1 July 2021. Although these changes don’t require you to do anything, they’re still important to know. Changes include increases to the employer super guarantee (SG), contribution limits and the transfer balance cap.
The super guarantee (SG) is increasing
Your employer pays a percentage of your salary into super. This is called the Superannuation Guarantee (SG). Since 1 July 2014, and up until 30 June 2021, the SG rate has been 9.5%. From 1 July 2021, it will rise to 10% and will continue to increase by 0.5% every year until 2025 where it will remain at 12%, unless further changes are made.
There's nothing you'll need to do. The increase to your contributions will be automatic from 1 July. If you want to confirm it's gone up you can check your pay slip after this date, or simply log in to Members Online and check your super balance.
Contribution limits are increasing
Both before and after-tax contributions have limits (known as caps). Any amounts over these caps will be subject to extra tax.
The limit for before-tax contributions will increase to $27,500 per year (previously $25,000) from 1 July 2021.
The limit for after-tax contributions will increase to $110,000 per year (previously $100,000) from 1 July 2021.
There are other contributions strategies available that allow eligible members to make contributions outside of the above limits.
You could get a super contribution from the Government of up to $500 if you earn less than $56,112 p.a. (previously $54,837 p.a.) and also make an after-tax personal contribution in your super account.
Transfer balance cap increase
If you start a retirement income stream for the first time on or after 1 July 2021 the transfer balance cap will be $1.7 million (an increase from $1.6 million). This is due to indexation.
Minimum pension drawdown
You must draw down a minimum percentage each year of your TTR or retirement pension account balance. As a temporary measure to respond to the COVID-19 pandemic, the Federal Government reduced the minimum pension drawdown rates by 50% for the 2019/20 and 2020/21 financial years, and has extended this for 2021/22.
Speak to a financial adviser at no extra cost to you.
If you need some help understanding your options, we have a team of experts ready to guide you.Request a call back
Advice about your super is included as part of your membership.